UNITED STATES BANKRUPTCY COURTNORTHERN DISTRICT OF NEW YORK-----------------------------------------------------------IN RE:

DEBORAH ANNE DEMPERIO CASE NO. 98-66701

Debtor Chapter 13-----------------------------------------------------------APPEARANCES:

STEPHEN LANCE CIMINO, ESQ.Attorney for Debtor307 South Clinton StreetSyracuse, New York 13202-1250

MILTON J. CRYSTAL, ESQ.Attorney for Edward T. Dumas447 East Washington StreetSyracuse, New York 13202-1915

FORTUNA S. HABIB, ESQ.Attorney for Onondaga County Dept. of Social Services600 South State Street, Suite 710Syracuse, New York 13202

MARK W. SWIMELAR, ESQ.Chapter 13 Trustee250 South Clinton Street, 5th FloorSyracuse, New York 13202

Hon. Stephen D. Gerling, Chief U.S. Bankruptcy Judge

MEMORANDUM-DECISION, FINDINGS OF FACT,CONCLUSIONS OF LAW AND ORDER

Presently before the Court is a motion filed May 6, 1999, by Deborah A. Demperio

(“Debtor”), through her counsel, requesting that the Court hold Respondents Edward T. Dumas

(“Dumas”), and Charles McGowen (“McGowen”), as Director of Child Support Services, County

of Onondaga Department of Social Services, in civil contempt for violation of the automatic stay

-2-

1 While the instant Motion is somewhat confusing as to the identity of the actualRespondents other than Dumas, the Court concludes that it will consider the additionalRespondents as McGowen and the County of Onondaga Department of Social Services(“OCDSS”). In reaching this conclusion, the Court notes that it is including the Child SupportServices (“CSS”), the Child Support Enforcement Bureau (“CSEB”), and the Support CollectionUnit (“SCU”) as subunits of OCDSS.

2 After the deadline to submit memoranda of law had passed, counsel for the Debtor andRespondents submitted additional papers without requesting an extension of the above deadline.The Court has not considered any of these submissions in ruling on this motion.

provisions of 11 U.S.C. § 362(a), and awarding the Debtor costs, damages, and attorney’s fees

as a result of their allegedly contemptuous actions.1 On June 8, 1999, the Court heard arguments

with regard to Debtor’s instant motion and the hearing was thereafter adjourned to June 22, 1999,

and finally to August 24, 1999, at which point the Court took the motion under submission. All

parties have submitted memoranda of law.2

JURISDICTIONAL STATEMENT

The Court has core jurisdiction over the parties and subject matter of this motion pursuant

to 28 U.S.C. §§ 1334(b), 157(a), 157(b)(1), and (2)(O).

FINDINGS OF FACT

On August 2, 1996, by virtue of an order of the Family Court of the State of New York,

County of Onondaga, Debtor was required to pay Dumas $57.80 per week in child support. See

Debtor’s Notice of Motion, filed May 6, 1999, at Exhibit A (Child Support Order). This order

-3-

3 The Court notes that all of the Respondents, with the exception of Dumas, have appearedby a single attorney, Fortuna S. Habib, Esq., whose title is attorney for the CSEB. The Court willrefer to Ms. Habib as counsel for all of the Respondents with the exception of Dumas.

4 Debtor’s counsel contends that the income execution did not terminate until December18, 1998. (See Debtor’s Motion at ¶ 9). Since both dates are well after Debtor filed her Chapter13 petition, the actual date is not critical.

directed that all child support payments were to be made to the SCU. Id. As a result of a 1990

change in New York law, when payments are directed to be paid through the SCU, the SCU must

issue an immediate income execution. Id. Consequently, the SCU executed on Debtor’s income

as a result of the Child Support Order in the sum of $115.60 biweekly. Id.

On October 16, 1998, the Debtor filed a voluntary petition for relief pursuant to Chapter

13 of the Bankruptcy Code (11 U.S.C. §§ 101-1330) (“Code”) and associated schedules

(“Chapter 13 Petition”). After filing the Chapter 13 Petition, on October 20, 1998, counsel for

Debtor personally delivered a time stamped copy of the Chapter 13 Petition to the Comptroller

of the County of Onondaga, apparently in an effort to stay the continuation of the income

execution of Debtor’s wages. See Debtor’s Motion to Determine Contempt, filed May 6, 1999

(“Debtor’s Motion”), at ¶ 6. Following the delivery of the Chapter 13 Petition, Debtor’s counsel

had numerous contacts with counsel for OCDSS.3 Despite the efforts of Debtor’s counsel to stop

the income execution, OCDSS continued to execute on Debtor’s income. The final income

execution took place on November 27, 1998, in the amount of $215.60. See attachments to letter

by Fortuna Habib, Esq., Respondents’ counsel, received by the Court, pursuant to its request, on

October 12, 1999 (“Habib Letter”).4

Although the final execution on Debtor’s income was November 27, 1998, on or about

January 22, 1999, Debtor received the first notice from SCU that it would be notifying the

-4-

Department of Motor Vehicles to suspend her driver’s license due to her failure to pay child

support. Debtor’s Motion at Exhibit E. In response to this notice, Debtor’s counsel allegedly

spoke to a representative of OCDSS at the end of January. See Debtor’s Motion at ¶ 9. After a

brief discussion, the representative allegedly made a series of entries into her computer and

assured Debtor’s counsel that the notices would stop. Id. Despite those assurances, Debtor

allegedly received a second notice on or about February 19, 1999. Id. at ¶ 10. Finally, on or

about April 26, 1999, Debtor received a notice from the Commissioner of Motor Vehicles, dated

April 23, 1999, that her license would actually be suspended effective May 7, 1999. Id. at ¶ 11

and Exhibit G. In a final effort to resolve this matter, the Debtor, herself, allegedly spoke to the

Commissioner of Social Services, complaining of the actions of the OCDSS. See id. at ¶ 13.

It is alleged that during that meeting, Debtor was advised, “you have a lawyer, have him do

something about it.” Id.

In order to compel Debtor to resume support payments, Dumas filed a motion for relief

from the automatic stay. On February 4, 1999, this Court signed an Order granting that motion

with regard to postpetition support obligations. The Order also lifted the stay with respect to

prepetition arrears “unless such claims are included in a plan which shall be confirmed by the

Court.” On March 5, 1999, OCDSS, again, executed on the Debtor’s income in the amount of

$215.60. Subsequently, OCDSS reduced the amount of the execution to $115.60.

On June 21, 1999, the Debtor’s Chapter 13 plan was confirmed by this Court. Debtor’s

confirmed plan provides for distribution to Dumas on account of past due child support in the

amount of $155.12 per month for fifty-nine months of the sixty month plan.

-5-

ARGUMENTS

Debtor argues that despite both constructive and actual notice of the filing of her Chapter

13 Petition, OCDSS and McGowen continued to deduct child support payments from Debtor’s

wages and sent two letters threatening to notify the Department of Motor Vehicles to suspend her

driver’s license because of her failure to pay support. Debtor contends these actions constituted

a violation of the automatic stay to such an extent as to warrant a finding of civil contempt

against OCDSS.

In response to the Debtor’s allegations, OCDSS claims that it neither sent nor caused to

be sent any notices pertaining to the Debtor’s driver’s license. Alternatively, OCDSS argues that,

even if it was responsible for sending out the notices, the act of sending those notices was not a

violation of the automatic stay because they were seeking suspension of the Debtor’s driver’s

license which is not property of the estate. Finally, even if suspension of the Debtor’s driver’s

license was a violation of the automatic stay, OCDSS contends that it is immune from suit by

virtue of the Eleventh Amendment to the U.S. Constitution.

In addition to its allegations against OCDSS and McGowen, Debtor argues that Dumas

should also be held liable for the alleged violations of the stay by OCDSS and McGowen. Debtor

contends that OCDSS and McGowen were agents for Dumas. Further, as a principal, Dumas

should be responsible for the acts of its agent, OCDSS and McGowen, and should also be held

liable.

-6-

In response to the Debtor’s allegations against Dumas, Dumas argues that he obtained

relief from the automatic stay on February 4, 1999. As a result of that relief, he contends that he

did not violate the stay because any payments he received were covered by that final Order. In

addition, Dumas asserts that there is no allegation of fact to support the contention that OCDSS

was acting as his agent.

DISCUSSION

Upon filing a bankruptcy petition, Code § 362(a) provides for an automatic stay against

any attempts to enforce or collect any prepetition claims from any property of the estate.

Property of the estate is defined in Code § 541(a), which delineates seven categories of property

interest. For debtors who file petitions under Chapter 13, Code § 1306 specifically notes that in

addition to those categories of property identified in Code § 541, the following is included as

property of the estate:

(a)(1) all property of the kind specified in such section that the debtor acquiresafter the commencement of the case but before the case is closed, dismissed, orconverted to a case under chapter 7, 11, or 12 of this title, whichever occurs first;and(2) earnings from services performed by the debtor after the commencement ofthe case but before the case is closed, dismissed, or converted to a case underchapter 7, 11, or 12 of this title, whichever occurs first.

(b) Except as provided in a confirmed plan or order confirming a plan, the debtorshall remain in possession of all property of the estate.

Once a Chapter 13 plan is confirmed, all property of the estate revests in the debtor. 11 U.S.C.

§§ 362(c)(1) and 1327(b).

Code § 362(h) allows individual debtors to recover damages, costs and attorneys fees that

-7-

5 Though Debtor’s motion papers make no specific reference to Code § 362(h), the Courtdeems that this section is applicable to these facts. It is noted that contempt is not included asa sanction within Code § 362(h).

accrue as a result of a willful violation of the automatic stay.5 In determining whether to impose

sanctions against a creditor pursuant to Code § 362(h), the Court uses the standard set by the

Second Circuit in Crysen/Montenay Energy Co. v. Esselen Assoc., Inc. (In re Crysen/Montenay

Energy Co.), 902 F.2d 1098, 1105 (2d Cir. 1990). There, the court held “any deliberate act taken

in violation of the stay, which the violator knows to be in existence, justifies an award of actual

damages.” Id. In addition to actual damages, punitive damages may be imposed if there is a

finding that the offending creditor “acted with maliciousness or bad faith.” Id.

In the case at bar, Debtor seeks sanctions against, Dumas, McGowen, and OCDSS for

violating the automatic stay. With respect to Dumas, Debtor alleges that he, as a principal, is

liable for the actions of OCDSS taken as his agent. In order to have an agency relationship, there

must be an agreement between the principal and the agent as to the existence of the principal-

agent relationship and a clear showing of intent by both parties. See In re Zacoum’s Estate, 115

N.Y.S.2d 42 (N.Y. Sur. Ct. 1952) (holding an agent can be appointed only at the will and by the

act of the principal); Boro Associates, Inc. v. Levy, 44 Misc. 2d 269, 253 N.Y.S.2d 592 (N.Y.

Civ. Ct. 1964) (holding consent of both principal and agent is necessary to create an agency

relationship).

Although Debtor asserts that there existed an agency relationship between Dumas and

OCDSS, Dumas simply received the checks sent to him by OCDSS. There is no evidence that

Dumas colluded with OCDSS as a principal to have them collect support payments from Debtor

postpetition. Debtor has asserted no facts which show the establishment of a postpetition agency

-8-

6 In addition to collecting the above amounts, on March 5, 1999, OCDSS collected$215.60 from Debtor after Dumas obtained relief from the automatic stay. Although the Courtdid not specifically award relief from the automatic stay to OCDSS, pursuant to New York Statelaw, Dumas could only receive his support payments through the SCU. After Dumas wasawarded relief from the automatic stay, OCDSS executed on Debtor’s income for $215.60 instead

relationship between Dumas and OCDSS. Debtor has failed to identify any affirmative action

on the part of Dumas to create such an agency relationship. In fact, the relationship between

Dumas, and OCDSS was created involuntarily pursuant to New York State law. See Child

Support Order. The Court finds no intention or action on the part of Dumas to create an agency

relationship with OCDSS. Therefore, the Court finds Dumas cannot be held in contempt or

sanctioned for the actions of OCDSS on the basis of a principal-agent relationship.

In addition to Dumas, Debtor seeks to sanction McGowen, and OCDSS for alleged willful

violations of the automatic stay. According to Debtor’s Motion, Debtor informed OCDSS of her

Chapter 13 filing by numerous methods. Debtor’s counsel personally met with case workers at

OCDSS on several occasions and corresponded with counsel for OCDSS. After each contact,

Debtor was assured that the income execution would stop. However, the income execution did

not stop until after the final income execution on November 27, 1998. This was over thirty days

after Debtor’s counsel personally delivered a copy of the Chapter 13 Petition to the County

Comptroller’s office.

Moreover, during that thirty day period, it appears that OCDSS executed on Debtor’s

income for an amount that was approximately $100 more than the Child Support Order required

her to pay. OCDSS collected the following amounts prior to Dumas obtaining an order of relief

from the automatic stay: October 30, 1998 – $215.60; November 13, 1998 – $215.60; November

27, 1998 – $215.60. The total of the foregoing collection activities amounts to $746.80.6

-9-

of the $115.60 permitted by the Child Support Order. This amount was $100 more than the ChildSupport Order required Debtor to pay. As OCDSS has provided no other explanation for thisextra $100, the Court is compelled to find that this was dedicated to prepetition arrears.

OCDSS also argues that they are not in violation of the automatic stay in seeking

suspension of the Debtor’s driver’s license because they allege that the license was not property

of the estate. OCDSS relies upon Code § 362 (b)(2)(B), which provides that the filing of a

petition does not stay the collection of alimony, maintenance, or support from property that is not

property of the estate. Prior to confirmation of a Chapter 13 plan, however, there are no non-

estate assets and even matrimonial creditors are stayed from enforcing their claims by Code §

362. See Sak v. Sak (In re Sak), 21 B.R. 305, 307 (Bankr. E.D.N.Y. 1982). While OCDSS

asserts that Debtor’s driver’s license is not property of the preconfirmation estate, its own

memorandum of law points out that such a view is clearly in the minority. See OCDSS

Memorandum of Law, filed August 16, 1999 (“OCDSS Memorandum of Law”) at 23-29.

Further, OCDSS’s claim that it may recommend suspension of the Debtor’s driver’s

license because it is not property of the estate is irrelevant. OCDSS was clearly attempting to use

the threatened suspension of the Debtor’s driver’s license to coerce her to satisfy a prepetition

debt. This is a violation of Code § 362(a)(6). Because OCDSS attempted to collect on a

prepetition debt in this manner, this Court finds that OCDSS was in violation of Code §

362(a)(6). Based upon the violations of Code § 362(a)(6) and the fact that OCDSS had actual

knowledge of the bankruptcy filing at the time it took these actions, the Court finds these actions

were willful.

OCDSS argues, even assuming its acts were contemptuous or otherwise sanctionable, it

is immune from prosecution pursuant to the Eleventh Amendment of the U.S. Constitution. The

-10-

Eleventh Amendment states, “The Judicial power of the United States shall not be construed to

extend to any suit in law or equity, commenced or prosecuted against one of the United States

by citizens of another state or by citizens or subjects of any foreign state.” U.S. CONST. amend.

XI. “As interpreted, the Eleventh Amendment prohibits suits in federal courts against state

governments in law, equity, or admiralty by a state’s own citizens, by citizens of another state,

or by citizens of foreign countries.” See Erwin Chemerinsky, FEDERAL JURISDICTION § 7.1 (3d

ed. 1999). This protection extends to states and state officials in appropriate circumstances but

generally does not extend to counties and similar municipal corporations. See Mt. Healthy City

Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977). However, if a county entity can

prove that it is “an arm of the state,” it will be afforded the protection given to the state by the

Eleventh Amendment. Id. As OCDSS is not a state entity, it must demonstrate that it is “an arm

of the state” in order for the protection afforded by the Eleventh Amendment to apply. Id.

To determine whether a municipal or county agency is “an arm of the state,” the Court

considers six factors (“Feeney factors”) enumerated in Feeney v. Port Authority Trans-Hudson

Corp., 873 F.2d 628 (2d Cir. 1989) aff’d on other grounds, 495 U.S. 299 (1990). These factors

are derived from the Supreme Court’s decision in Lake Country Estates, Inc. v. Tahoe Regional

Planning Agency, 440 U.S. 391 (1979). They require a court to examine:

(i) how the entity is referred to in the documents that created it; (ii) how thegoverning members are appointed; (iii) how the entity is funded; (iv) whether theentity’s function is traditionally one of local or state government; (v) whether thestate has veto power over the entity’s actions; and (vi) whether the entity’sobligations are binding upon the state.

Feeney, 873 F.2d at 630-631.

If analysis of the Feeney factors presents an inconclusive result as to whether the municipal

-11-

agency is “an arm of the state,” the Court may then rely on two additional inquiries: “(a) will

allowing the entity to be sued in federal court threaten the integrity of the state? and (b) does it

expose the state treasury to risk?” See Mancuso v. N.Y. State Thruway Auth., 86 F.3d 289, 293

(2d Cir. 1996). Of these two inquiries, it is most important to consider the risk to the state

treasury. See id. (citing Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 48 (1994)).

The first Feeney factor the Court will consider is how the entity is referred to in the

documents that created it. N.Y. Social Services Law § 111-h governs the establishment of

SCU as the collection division of a social services district and states in relevant part:

1. Each social services district shall establish a support collection unit inaccordance with regulations of the department to collect, account for and disbursefunds paid pursuant to any order of child support or child and spousal supportissued under the provisions of section two hundred thirty six or two hundred fortyof the domestic relations law, or article four, five, five-A or five-B of the familycourt act...

N.Y. Social Services Law § 111-h (McKinney Supp. 1999).

Recently, this Court, in an opinion by the Honorable Robert E. Littlefield, Jr., discussed

the identical issue in In re Durant, 239 B.R. 859 (Bankr. N.D.N.Y. 1999). In that case, the

debtor, Jeffrey Durant (“Durant”), paid child support in the amount of $35 per week pursuant to

a family court order. See id. at 861. Two years after the family court order had been entered,

Durant filed for protection pursuant to Chapter 12 of the Code. Thereafter, Jefferson County

Department of Social Services (“JCDSS”) continued to levy on Durant’s income. On April 17,

1997, the Court ordered JCDSS to stop all income levies and executions. Id. In response to

these continued levies, debtor filed a motion for contempt against JCDSS. In opposition to

debtor’s motion for contempt, JCDSS claimed that they were protected under the Eleventh

Amendment.

-12-

In ruling on the first Feeney factor which addresses how the entity is referred to in the

applicable sections of the statute, Judge Littlefield concluded that the facts weighed against

immunity:

because the support collection unit is created by the county [Social ServicesDepartment]...[t]he state department delegates the duty of establishing the supportcollection unit to the county [Social Services Department] and the responsibilityof the county [Social Services Department]’s activities in assisting the state inenforcement and collection of support, to the organizational unit established bythe county [Social Services Department].

Id. at 866.

Anticipating that this Court would look to Durant for guidance on this factor, counsel for

OCDSS claims that Judge Littlefield misinterpreted the word “establish.” Counsel asserts that

according to Webster’s New World Dictionary, the word “establish” means, not to create, but to

“make stable, to settle, order, ordain or to set up.” See OCDSS Memorandum of Law at 11.

Moreover, OCDSS alleges that the department of social services is created by New York State

law and is set up by local acts. Id. OCDSS alleges that this common usage of the term

“establish” is further supported by its use in the Establishment Clause of the First Amendment

of the U.S. Constitution. OCDSS relies on Everson v. Bd. of Ed. of Ewing Tp., 330 U.S. 1, 67

S.Ct. 504 (1947) in support of its contention. In that case, the Supreme Court defined the

“establishment of religion clause” to mean at least the following:

Neither a state nor the Federal Government can set up a church. Neither can passlaws which aid one religion, aid all religions, or prefer one religion over another.Neither can force nor influence a person to go to or to remain away from churchagainst his will or force him to profess a belief or disbelief in any religion. Noperson can be punished for entertaining or professing religious beliefs ordisbeliefs, for church attendance or non-attendance. No tax in any amount, largeor small, can be levied to support any religious activities or institutions, whateverthey may be called, or whatever form they may adopt to teach or practice religion.Neither a state nor the Federal Government can, openly or secretly, participate in

-13-

the affairs of any religious organizations or groups or vice versa.”

Everson, 330 U.S. at 15-16, 67 S.Ct. at 511-512 (citations omitted).

OCDSS’s reliance on Everson is misplaced. The “establishment” of a pre-existing

religion is not the same as the establishment of a new division of the department of social

services. In Everson, the Supreme Court defined the limitations of federal and state governments

with regard to the Establishment Clause but did not define the word “establish” in every context.

This Court agrees with Judge Littlefield and holds SCU is established by the OCDSS in

accordance with state regulations. Thus, the first factor weighs against a finding that OCDSS is

protected under the Eleventh Amendment.

The second Feeney factor is how the governing members of the entity are appointed. In

New York, there is a commissioner of public welfare in each county who administers public

assistance for his/her own county. See N.Y. Social Services Law § 65 (McKinney 1992). The

commissioner of each county is appointed by the county body or officer for a term of five years.

See N.Y. Social Services Law § 116. Although OCDSS is established by the county, the state

department supervises various activities of the OCDSS and the commissioner. See N.Y. Social

Services Law §§ 111-b and 111-c (McKinney 1992). Therefore, because the county

commissioner and various activities of the OCDSS are supervised by the state, the second Feeney

factor weighs in favor of immunity.

The third Feeney factor pertains to how the entity is funded. The funding structure of

OCDSS is described by N.Y. Social Services Law § 111-d which states that after deducting any

federal funding, the county is responsible for fifty percent of the expenditures relating to OCDSS.

N.Y. Social Services Law § 111-d (McKinney Supp. 1999). OCDSS asserts that in Onondaga

-14-

County sixty-six percent of OCDSS’s funding is derived from federal funds. After deducting that

amount, exactly one half of the remaining budget or seventeen percent is state funded and ½ or

seventeen percent is funded by the county. See OCDSS Memorandum of Law at 13. OCDSS

claims that “funding and percentages of funding is a measure to determine where control lies.”

See id. It goes on to assert that it is “[t]he state that controls the power of management, policy

and appointment of directors.” Id. at 14. This argument is one more appropriately made in

connection with the second Feeney factor. The bottom line is that the state provides only

seventeen percent of OCDSS’s budget.

In Holley v. Lavine, 605 F.2d 638 (2d Cir. 1979) the Court of Appeals for the Second

Circuit clarified the intent inherent in the third Feeney factor. The Second Circuit rejected the

argument that the county needed Eleventh Amendment protection as an “arm of the state” where

“New York State would only bear 25 percent of the total liability.” See Holley 605 F.2d at 644.

(emphasis added). In this case, only 17 percent of the total budget is state funded. See OCDSS

Memorandum of Law at 13. If, as in Holley, the Second Circuit has concluded that a contribution

by the state to the potential liability of the entity of 25 percent was insufficient to afford the

county protection under the Eleventh Amendment, surely the 17 percent the state contributes to

OCDSS’s budget is insufficient to justify that protection.

Based on Holley, the Court concludes that the third Feeney factor, used to measure the

extent of the financial burden the state would bear if judgment were awarded against OCDSS,

weighs against awarding Eleventh Amendment immunity. Moreover, this rationale is consistent

with the concept of protecting the state treasury. Thus, the third Feeney factor weighs against

awarding immunity in this instance.

-15-

The fourth Feeney factor is whether the entity’s function is traditionally one of local or

state government. As stated above, the SCU is established by the county social services

department. See NY Social Services Law § 111-h(1). It is operated by the county social services

department and its officials are under state supervision in accordance with state regulations. See

Durant, 239 B.R. at 867 (citing N.Y. Social Services Law §§ 111-c and 111-h (McKinney Supp.

1999)). In Durant, because no further information was offered by JCDSS to help determine

whether support collection is traditionally a county or a state function, Judge Littlefield held this

factor to be inconclusive. See id.

To rectify what was a lack of information in Durant, OCDSS directs the Court’s attention

to the N.Y. Constitution. OCDSS argues that “nothing in the [N.Y. State] Constitution shall

prevent the legislature from providing for health and welfare services for all children or for the

aid, care and support of neglected and dependent children.” See OCDSS Memorandum of Law

at 14 and N.Y. Constitution Article VII § 8(2). Article VII of the N.Y. Constitution addresses

itself to “State Finances.” Section 8 identifies exceptions to the prohibition against gift or loan

of state credit or money to or in aid of “any private corporation or association or private

undertaking...” See N.Y. Constitution Article VII § 8(1). This section addresses the ability of

the legislature to provide state funding in support of the health and welfare of children either

directly or through a subdivision of the state. It says nothing about providing the services

themselves as being a state function. The Court finds that OCDSS’s argument is unpersuasive

and that the fourth Feeney factor does not warrant a finding of immunity.

The fifth Feeney factor involves whether or not the state has veto power over the entity’s

actions. As discussed in Durant, the relevant part of the Social Services Law is § 20(2). This

-16-

section discusses the role of the state social services department with regard to the collection unit:

(b) [the state department of social services shall] supervise all social serviceswork, as the same may be administered by any local unit of government and thesocial services officials thereof within the state, advise them in performance oftheir official duties and regulate the financial assistance granted by the state inconnection with said work.

N.Y. Social Services Law § 20(2)(b) (McKinney 1992). Subsection (3) of § 20 authorizes thestate department of social services:

(a) to supervise local social services departments and in exercising suchsupervision the department shall approve or disapprove rules, regulations andprocedures made by local social services officials within thirty days after filingof same with the commissioner.

N.Y. Social Services Law § 20(3)(a) (McKinney 1992). N.Y. Social Services Law § 20(3) also

authorizes the state department to withhold reimbursements. See N.Y. Social Services Law §

20(3) (McKinney 1992) and Durant, 239 B.R. at 867-868.

Counsel for OCDSS argues that because the information regarding the functions of

income execution and generation of notices to collect child support is gathered and electronically

sent to a mainframe computer located at the state capitol in Albany, New York, which computer

generates the notices and income executions based on thresholds set by state law, that the State

of New York is the sole decision maker and has veto power. See OCDSS Memorandum of Law

at 16.

All of the definitions of “veto” contained in Webster’s Third New International

Dictionary reference an affirmative act made by some authority with the power to prohibit an

action. For example, “an authoritative prohibition or negative; an act or instance of forbidding

something proposed.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2548 (1981).

Receiving information into a mainframe computer to enable the computer to either mechanically

-17-

generate a letter or not cannot be considered a veto. The authority to act on the income execution

came from OCDSS when that entity sent the information to the mainframe computer in Albany.

In response to that information, the New York State Department of Social Services mechanically

inputs the information into the computer. There is no procedure or authority to review the

decisions of OCDSS. Moreover, there is no statute which specifically grants the New York State

Department of Social Services the power to veto the decisions made by OCDSS. Therefore the

Court finds the fifth Feeney factor weighs against granting immunity.

Finally, the sixth Feeney factor is whether the entity’s obligations are binding on the state.

In Mancuso, the Second Circuit, in considering this factor, focused on whether the State of New

York would be legally required to pay the entity’s debts and whether a judgment against that

entity would practically require the State of New York to make payments. See Mancuso, 86 F.3d

at 296. In order for the Court to consider whether the State of New York would be required to

pay OCDSS’s debts, the Court must consider the statutory relationship between Onondoga

County, as the ultimate authority over OCDSS, and the State of New York.

The New York State courts have defined that relationship as follows:

Erie County is a duly established social services district (Social Services Law §§52, 61(3)). As such it bears ultimate responsibility for the administration ofpublic assistance and care for its residents although it may share thisresponsibility, under certain circumstances, with other municipalities locatedwithin its territorial boundaries (Social Services Law, § 69). An importantelement of this responsibility is the mandatory duty of the of the County’s boardof supervisors ‘ to make adequate appropriations...to provide the public assistanceand care required by ... (the Social Services Law)’ (Social Services Law § 88).Additionally, the County is specifically obligated to make deficiencyappropriations, should the need arise, to fulfill its public assistanceresponsibilities with regard to both home relief (Social Services Law, § 93(3), (6))and the federally-aided programs of aid to dependent children and medicalassistance (Social Services Law, § 92(1)(a), (c)). The Social Services Law doesprovide for reimbursement by the State for fifty percent of the nonfederally

-18-

reimbursed cost of these programs, including day care (Social Services Law, §§153(1)(d), (e), 368-a(1)(d), 410-c(1)(a)). Further the statute places the power overthe administration and regulation of this system of public assistance and carelargely in the hands of the State Department of Social Services and itsCommissioner (Social Services Law, §§§ 17, 20, 34).

See Holley, 464 F.Supp. at 723-724 (quoting Toia v. Regan, 387 N.Y.S.2d 309, 312 (1976)).

Thus, it is the ultimate responsibility of the county governments to finance public

assistance payments regardless of whether higher levels of government refuse to reimburse the

county. See Holley, 464 F.Supp. at 724. Moreover, “[a]lthough in most cases state and federal

funding may be available for reimbursement, there is no clear rule requiring the state to

indemnify the counties for judgments entered against them.” Id.

Because there is no clear rule regarding indemnification, OCDSS alleges that there is a

second part to the analysis under the sixth Feeney factor: “does the state treasury benefit from

the same work that has the potential to expose the state treasury to harm.” See OCDSS

Memorandum of Law at 15. OCDSS’s contention that there is a second question pertaining to

how the state benefits from the work is incorrect. The sixth Feeney factor does not focus on the

benefit to the State of New York. Rather, this factor considers the financial responsibility of the

State of New York in the event that a court rendered a judgment against the County of Onondaga.

As OCDSS has failed to assert any evidence that the obligations of OCDSS are binding on the

state, the Court is uncertain as to the extent of the relationship between OCDSS and the State of

New York with regard to the obligations of OCDSS. As a result, the Court finds that OCDSS has

failed to prove that the obligations of OCDSS are binding on the state.

Because the six factors do not unanimously support immunity or lack thereof, the Court

must consider two additional factors: whether allowing the entity to be sued in federal court will

-19-

threaten the integrity of the state and whether it will expose the state treasury to risk. See

Mancuso, 86 F.3d at 293. As discussed above, the state only contributes seventeen percent to

OCDSS’s total budget. As the state treasury would, at most, be exposed to seventeen percent of

the total judgment, the state treasury would be at minimal risk by a judgment against OCDSS.

Thus, the sole remaining issue to be determined is that of whether a suit against OCDSS

in a federal court will threaten the integrity of the state. The state has no direct involvement in

defending this motion against OCDSS. The state has filed no papers and has not appeared to

protect the interests of OCDSS. Thus, the integrity of the state would not be in jeopardy. For

the reasons stated above, the Court concludes that OCDSS is not immune under the Eleventh

Amendment.

With regard to Respondent McGowen, the Court finds that as McGowen makes no

argument to distinguish himself from Respondent OCDSS, the Court must consider his liability

for those violations of the automatic stay. In Durant, supra, Respondent Amy Farmer, a clerk

for JCDSS, argued that she should not be held liable based on the doctrine of respondeat

superior. See Durant, 239 B.R. at 869. As the Executive Director of CSEB, McGowen could

not possibly make a similar argument. As a result, because McGowen makes no argument to

distinguish himself from OCDSS and because as the Executive Director of CSEB, he could not

have made an argument based on the doctrine of respondeat superior, the Court finds that

McGowen is also liable for the violations of Code § 362(a)(6) discussed above and that those

violations were willful. As the Court has found that OCDSS is not entitled to Eleventh

Amendment immunity, the Court finds McGowen is likewise not entitled to Eleventh

Amendment immunity.

-20-

In response to Debtor’s Motion, Dumas requests that this Court award sanctions against

the Debtor. In order to determine if these sanctions are appropriate, the Court must determine

the nature of the contempt alleged and determine if the correct procedures have been followed.

See Dorsagno v. Cooley, No. 95-cv-201, 1996 WL 312180 at * 3 (N.D.N.Y. May 31, 1996).

Rule 9020 of the Federal Rules of Bankruptcy Procedure (“Fed. R. Bankr. P.”) provides

in relevant part:

Contempt committed in a case or proceeding pending before a bankruptcyjudge...may be determined by the bankruptcy judge only after a hearing on notice.The notice shall be in writing, shall state the essential facts constituting thecontempt charged and describe the contempt as criminal or civil and shall statethe time and place of hearing ...

See Fed. R. Bankr. P. 9020.

Thus, in order for a motion for contempt to be considered by the court, the complainant must

serve a notice that states the essential facts relevant to the contemptible conduct and describe the

contempt as civil or criminal.

In applying these requirements to the instant motion, Dumas, in his Answering

Memorandum, asserts that his being named in Debtor’s motion was malicious and intended to

make enforcement of his rights so costly that he would abandon them. See Answering

Memorandum of Dumas, dated August 17, 1999, at 3. Moreover, Dumas states, “Naming

[Dumas] as respondent was willful and reckless and has been extremely upsetting, painful, and

costly to me.” See Answering Affidavit of Edward T. Dumas sworn to May 27, 1999, (“Dumas

Affidavit”) at 3. Assuming the above comments would be sufficient for the notice requirement

of Fed. R. Bankr. P. 9020, Dumas fails to allege any facts constituting the contempt charged or

to describe the contempt as criminal or civil contempt. As a result, the Court will not hold the

-21-

Debtor in contempt.

Based on the foregoing it is hereby

ORDERED that Debtor's Motion as to OCDSS and McGowen is granted and OCDSS and

McGowen will reimburse the estate in the amount of $ 646.80 which represents the income

collected by OCDSS and McGowen subsequent to the filing of the Chapter 13 case, but prior to

this Court’s order for relief from the automatic stay, and it is further

ORDERED that OCDSS and McGowen will reimburse the estate in the amount of $100

which represents the income collected by OCDSS and McGowen after this Court’s order for

relief from the automatic stay, but in excess of the amount the Child Support Order authorized

the SCU to deduct from Debtor’s income, and it is further

ORDERED that OCDSS and McGowen will compensate Debtor’s counsel for reasonable

fees and costs associated with the filing and arguing of this motion. Debtor’s counsel will submit

time records to the Court and serve same upon OCDSS and McGowen within 30 days of the date

of this Order so that the Court may assess the fees and costs associated with this motion.

Dated at Utica, New York

this 6th day of January 2000

_____________________________________STEPHEN D. GERLINGChief U.S. Bankruptcy Judge